Safe and Sound

The Yoakum National Bank

Yoakum, TX
5
Star Rating
The Yoakum National Bank is an FDIC-insured bank started in 1890 and currently headquartered in Yoakum, TX. The bank holds equity of $29.7 million on $217,975,000 in assets, according to June 30, 2017, regulatory filings.

Thanks to the work of 31 full-time employees, the bank currently holds loans and leases worth $85.5 million, including real estate loans of $57.8 million. U.S. bank customers currently have $187.5 million in deposits with the bank.

Overall, Bankrate believes that, as of June 30, 2017, The Yoakum National Bank exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's an analysis of how the bank faired on the three key criteria Bankrate used to evaluate American banks on safety and soundness.

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a buffer against losses and affords protection for accountholders when a bank is experiencing economic trouble. It follows then that when it comes to measuring an an institution's financial resilience, capital is important. When it comes to safety and soundness, more capital is preferred.
The Yoakum National Bank racked up 18 out of a possible 30 points on our test to measure capital adequacy, above the national average of 13.38.

A bank's Tier 1 capital ratio is a widely used measure of this buffer. The Yoakum National Bank's Tier 1 capital ratio was 31.44 percent, higher than the 6 percent level regulators consider adequate, and exceeding the national average of 25.16 percent. A higher capital ratio suggests the bank will be better able to weather financial challenges.

Overall, The Yoakum National Bank held equity amounting to 13.64 percent of its assets, which exceeded the national average of 12.10 percent.

Asset Quality Score

This test's purpose is to estimate how the bank's capitalization and allocated loan loss reserves could be affected by problem assets, such as past-due loans.

A bank with extensive holdings of these types of assets could eventually be forced to use capital to absorb losses, reducing its equity buffer. It also means that there are likely to be many assets that are in non-accrual status and no longer earning money, diminishing earnings and elevating the chances of a failure in the future.

The Yoakum National Bank scored 40 out of a possible 40 points on Bankrate's test of asset quality, beating the national average of 37.62.

A handy indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets. As of June 30, 2017, 0.69 percent of The Yoakum National Bank's loans were noncurrent -- in other words, they were more than 90 days past due or were in non-accrual status. That's below the national average of 1.04 percent.

Banks maintain a reserve known as an "allowance for loan and lease losses" to deal with problem assets . Comparing the that reserve's size to the total amount of problematic loans can be a helpful indicator when evaluating a bank's ability to manage troubled assets. Unfortunately, the FDIC did not provide information on The Yoakum National Bank's loan loss allowance in its most recent filings.

Earnings score

A bank's ability to earn money affects its safety and soundness. Earnings may be retained by the bank, boosting its capital buffer, or be used to deal with problematic loans, likely making the bank better prepared to withstand financial trouble. Conversely, losses take away from a bank's ability to do those things.

The Yoakum National Bank scored 20 out of a possible 30 on Bankrate's earnings test, better than the national average of 16.52.

Return on equity, calculated by dividing net income (profit, basically) by the total amount of equity, is one widely used measure of a bank's earnings. The most recent annualized quarterly return on equity for The Yoakum National Bank was 10.71 percent, above the national average of 9.28 percent.

The bank reported net income of $1.5 million on total equity of $29.7 million for the twelve months ended June 30, 2017. The bank had an annualized return on average assets, or ROA, of 1.41 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.14 percent.








WHAT IS SAFE & SOUND?

Bankrate.com's Safe & Sound Ratings provide a star rating system to evaluate the current financial status of financial institutions. The information gathered about banks, credit unions and thrifts is updated as set forth in the Terms of Use of Safe & Sound Ratings and Reports. The Safe & Sound Ratings information is grouped by categories of banks, thrifts and credit unions.

Scoring methodology

Bankrate.com evaluates the financial condition of institutions and assigns a one- to five-star rating for each with five stars representing the highest rating. Institutions with satisfactory performance will generally receive a rating of three or more stars. The majority of institutions fall into the three- to four-star range. An institution with an "NR" rating may be too new to rate or may have limited the publicly available information in their regulatory filings. The "NR" is not an indication of financial strength or weakness. The Safe & Sound rating is believed to be reliable, but the information is not guaranteed. In addition, events since the information was collected may have altered the institution's financial condition.